Predicting Recession: Negative GDP, Business Cycles, and Money

Congressman Ron Paul gave a compelling speech before Congress on May 15, 2000 that predicted much of what has happened in global financial circles, and very likely much of what will come. It's not difficult to see, one hardly needs to extrapolate the data to see the writing on the wall. However, it is important that we have reliable sources of information.

Many in financial circles believe that economic statistics provided by the U.S. government are reliable and accurately portray GDP, for example. According to these statistics, the economy has not shown two consequtive quarters of negative GDP. However, this is only because the official reported numbers are false. If one tracks the statistics according to how they were tracked a couple of decades ago, using (more) real measures, then the truth will out. In fact, we have had at least 12 consecutive quarters of negative GDP. For example, have a look at John Williams' Shadow Government Statistics site.

In actuality, we're in a massive stagflation. And the full force of this tsunami has yet to hit home. Give it a couple more years, and when it does—look out! The efforts on the part of the U.S. government's media machine are almost exclusively for perception management and controlling public opinion, invariably with false information in an ultimately futile attempt to keep the masses pacified thinking everything is just fine.

Further, counter to conventional wisdom, business cycles are not a part of true capitalism. True capitalism has rarely been seen, except perhaps to some degree prior to the institution of the Federal Reserve in 1913, or it's various attempts in the 19th century to obtain a monopoly on money creation in the United States. True captitalism leaves the government to perform only one task as far as economics is concered: protect the free market—keeping it truly free. Laissez-faire Capitalism = True Capitalism.

And what about the argument that business cycles have also occured prior to the establishment of the Federal Reserve? Although this may be true to some degree, it is largely due to the same interests involved influencing economic policy that sought to create the Fed in the first place. Prior to the Fed these interest groups did not have the official sanction of government; afterwards they did. For more information read, "The Creature from Jekyll Island" by G. Edward Griffin as one reputable source; there are several others, including works by Ludwig von Mises, Murray Rothbard, and even Ron Paul.

Ron Paul almost prophetically spoke of a massive economic "pullback" in the years to come. However, quite contrary to what many think, he was not referring to the collapse of the technology bubble but something far more comprehensive and pervasive: he was referrring to a global economic crisis. One in which our entire global economic system would be in a shambles—due largely to the fact that a fiat debt-based U.S. currency has been the world's reserve currency for the better part of a century, coupled to the realization that there isn't enough liquidity to finance this massive "credit card bill." If one reads the Gold Anti-Trust Action Committee (GATA) with any degree of regularity, one will see that over the last 2-3 years many central banks all over the world have been trying very quietly to divest themselves of US dollars, and then downplaying this divestiture in public circles so that they don't overly affect the markets, whilst at the same time ensuring they don't shoot themselves in the foot for the next round of divestiture.

The only way to have real, solid, non-superficial growth is to change the way our money is fashioned. We must divest ourselves of a debt-based Keynsian system in favour of an asset-based Misesian system. And gold-backed, silver-backed or any other difficult to obtain commodity backing is ideal for this purpose.

Ron Paul's insights into the nature of coin, currency and economics, are frighteningly accurate. Much of the economics we learn in college and university is largely a scam to perpetuate the existing power structures, groom us into a deluded self-assured malaise to occupy various positions in these instutitions, with the dangling promise that we too might be powerful, important, and wildly successful. And who knows? If we play our cards right, perhaps one day we might even become the keepers of these houses of cards.

Turn on, tune in, drop out.